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Since Toyota products have a reputation for reliability, the resale value of their
vehicles tends to be much higher than many other producers.The most serious threat to
Toyota is widely considered to be Honda Motor company. However, Toyota has done
some substantial work on their products and price points to stay competitive against
Honda. Below are some comparisons between Honda and Toyota products, and the
price points for a base product, and fully loaded.
Consistently, Honda seems to match Toyota on the lower levels of price, but on higher
priced an equipped models, the prices on Honda vehicles seem to be substantially
higher than on comparable Toyota products. This would seem to favor Toyota, giving
them a better image of Value and a better price on the same top quality merchandise.
Porters Generic Strategy
Differentiation- it involves creating a perception about a product that it is superior than
the competitors' products. And hence a premium price can be charged.
technical research institute by Schiro Honda the company opened a $44 million auto
plant in Alabama (2000). Honda was awarded the bestselling car in America in 2001.
Ford Motor Company is based in Dearborn, Michigan, which manufactures and
distributes automobiles in more than 200 markets across 6 continents. The company
has employed more than 300,000 people and 108 auto plants worldwide. The
company's affiliated automotive brands include Lincoln, Land Rover, Mazda and
Jaguar.
Indirect competition includes Motorcycles & mass transit. Consumers who look for cost
effective transportation would choose the above mentioned modes of transportation
posing. This poses indirect threat to the company as Toyota mainly targets average
income group of customers as against luxury segment which is only targeted by Lexus.
Toyota Production System: Toyota's president, Toyoda Kiichiro and, later Ohno Taiichi,
the real architects of the (TPS), developed a highly efficient production system later
characterised as 'lean production'. Toyoda's methods paralleled those of Henry Ford
several decades earlier, although Toyota's approach to both product development and
distribution proved to be much more consumer-friendly and market-driven.
Efficient Supply chain relationships and distribution networks: In both Japan and Korea
Toyota, has been able to rise above western cultural and institutional barriers of Asian
models of supply chain networks. They hence been able to realise advantages of
production and customer satisfaction in the US.
Conversely, Asian manufacturers who have not been able to surpass the cultural barriers
have been adopted western models, for e.g. Daewoo, have performed poorly in US
market.
In large, this advantage of supply chain management is attributable to the precision in
which Toyota has been able to co-ordinate the activities of its network of 300
components suppliers.